Exchange Value

In the WikiPedia article on Exchange Value, a commodity is supposed to have four (4) values. This is incorrect - it has only two (2) values: Use Value and Exchange Value.

Both of these values are directly observable. Use Value is the relative enjoyment of a commodity by an individual compared to other commodities. Exchange Value is what two (2) individuals determine to be a fair exchange between quantities of different commodities.

Use Value may well determine the motivation for exchanging a quantity of a commodity that I prefer less for a quantity of another commodity that I prefer more of. It is possible that I may well go through a series of exchanges in order to gain this.

At present (whilst typing), I am drinking a glass of water. I am not eating an orange. The Use Value of the glass of water is greater than that of an orange for me at the present time.

In the near future, I will have finished drinking the water. Then the Use Value of the glass of water and an orange will be indistinguishable because I will not be preferring one over the other at that time.

Note that I am doing a pair-wise comparison between types of commodities (currently a vague term). This comparison is not a transitive function. If I prefer A to B, and B to C, then does not necessarily mean that I prefer A to C.

With regards to Exchange Value, two (2) individuals are involved in the exchange of different types of commodities. One would not exchange oranges for oranges, unless the oranges differred in some aspect.

Assume that I have twelve (12) oranges, and you have ten (10) apples. There are 120 (= 12 x 10) possible exchange values starting with one (1) orange for one (1) apple, and up to twelve (12) oranges for ten (10) apples.

What then is the right Exchange Value between your apples and my oranges? If we make an exchange, then that is the right answer for us at that time.

Other people may say that the Exchange Value is wrong. Then they would say that one of us profited by the exchange because the Exchange Value was higher than the social average of the Exchange Value for that commodity.

Say we exchanged six (6) oranges for five (5) apples. So, the Exchange Value of six (6) oranges is five (5) apples, and vice verse.

Fred says that I gained an apple on the deal. He means that he thought the Exchange Value should have been six (6) oranges for four (4) apples. And a lot of other people may agree with him.

If that is so, then the social average of the Exchange Value of six (6) oranges would be four (4) apples.

The social average of the Exchange Value can then be determined democratically is there is a sufficiently large number of people involved in the process of exchanging oranges for apples.

However, this social average may change over time.